To: HoyaBob who wrote (51350 ) 7/14/1998 9:42:00 PM From: Mohan Marette Read Replies (1) | Respond to
Ref:Intel- Looking behind the numbers.However, analysts said the numbers behind the numbers indicate that Intel's outlook remains mostly positive. Wall Street didn't seem too dismayed that earnings per share missed First Call's estimate of 0.68 by 2 cents, given that the second half of the year tends to be seasonally stronger for the computer industry, and that, at least for this quarter, Intel was perhaps a victim of its own cost-cutting success. Despite settling 1.68 points lower at 80.68, Volpe Brown Whelan analyst Eric Rothdeutsch was confident Intel would deliver, upgrading the stock from Neutral to Buy on Tuesday. Ashok Kumar, analyst with Piper Jaffray, was equally pleased. "It was in line with our expectations," said Mr. Kumar, who just recently raised his second quarter earnings forecast to 0.70, and maintains a Buy recommendation on the stock. Mr. Kumar, noting that second quarter earnings of 0.66 reflected an inventory write down of 0.04 due to further transition to the Pentium II chip and charges associated with Intel's prior acquisition of Digital Equipment's (DEC) semiconductor manufacturing operations, felt that essentially the company had met his 70-cent estimate. Robert Chaplinsky, an analyst with Hambrecht & Quist, was also on board, emphasizing that investors should look beyond the numbers to really understand how Intel is doing. "On an operating basis, they were a little below consensus, but that's really not an apples to apples comparison," said Mr. Chaplinsky. "They actually performed better than expected in terms of cost reductions, which hurt their bottom line, but which will help them in the long run." Mr. Chaplinsky further noted that Intel saw a significant progress in their notebook chip business, and actually experienced improvement in Japan. "With all of these things, it looks like the third quarter could be pretty good," said Mr. Chaplinsky. H&Q maintains a Buy rating on the stock. redherring.com
